A compelling business case for Human Potential Realisation

In this case study you will discover how a London-based supermarket, Thornton’s Budgens, took significant steps to realise more of the Human Potential of its organisation and as a result created a breakthrough in business performance. You will also learn that these kinds of subjective human-centric interventions can be measured, analysed and re-applied in different contexts to transform businesses. Hopefully this will inspire you to go on a similar journey for your business.

Executive Summary

Andrew Isaac Thornton is the owner of Thornton’s Budgens, a franchise within the Budgens supermarket brand of independently owned stores serving local communities. He is also the founder of Heart in Business Limited, an organisation with the purpose to inspire and advise companies on “growing people, growing business to full potential for a better society”.

Following a difficult year in 2014 with like for like (LFL) sales at Thornton’s Budgens declining -7%, Andrew decided to invest significantly in developing the human potential in his organisation. The objective was to unleash more creativity and capacity for innovation by coaching the leadership team and one third of the staff. In this way, he could experiment and learn directly in his business, allowing him to bring this approach and its findings to other organisations.

In 2016, Thornton’s Budgens sales had turned around. LFL sales were now growing at 5%, whilst benchmark store’s sales were declining 5%. Andrew believed that the turnaround of his business was a direct result of harnessing the creative potential of his people and bringing many new innovative ideas and ways of working to the store. However, he was missing a way to put concrete measures behind the intangible dimensions of human potential. Therefore earlier this year an innovative research plan was put in place to understand whether a direct link could be made between the investments in human potential and business performance.

Indeed, the results of the Human Potential Assessment conducted confirmed a higher level of Human Potential utilisation at Thornton’s Budgens store with a score of 64%, 8% higher than the control store. In terms of other performance measures, average length of employee service was significantly higher by +55% and gross margin increased during 2016 by 1.5 points and has grown a subsequent 1.5 points so far in 2017.

In addition to the tangible business benefits, it was also clear that this work had the potential to rub off on a much wider group of people – family and friends of the employees, customers of the business, people in the community, suppliers, the environment and of course shareholders.

Testimonials

Investing in Human Potential became contagious as the owner of the control store saw the power of the insights uncovered through the assessment and has already put some actions in place. “I admit to having been skeptical at first about the process and the likely benefits it would bring, but I’m fully converted into believing that I can bring about significant improvements to the way we work.”, he said.

Call to Action

As you read these lines, whether you are an employee, a manager or a business leader, I invite you to take a step back and reflect on the following questions: How much of the Human Potential of my organisation is being utilized today? How can I create an environment conducive to people bringing the best of themselves, everyday? What would be possible if I could increase the Human Potential utilisation of my organisation by 5, 10 or even 20 points? If these questions resonate with you, then feel free to contact Heart in Business Limited or BEING at Full Potential – contact details are provided at the end of this report.

BACKGROUND

The Call for Change – Shifting the Paradigm of the Retailing Industry

Andrew Isaac Thornton has been the owner of Thornton’s Budgens supermarket in London since 2007. In 2014, when sales declined significantly, the UK retail industry was (and still is) in a fierce battle competing exclusively on price. This price war is driven by the discounters and followed by the major multiple players, making life for Independent Retailers more and more perilous. The precarious business situation drove Andrew to raise fundamental questions about the future of his store. How could it get out of this battle, one it would most probably lose, and differentiate itself from competition? What is Thornton’s Budgens’ unique value proposition? These questions drove Andrew to refocus on the business’ vision of “The Community Supermarket that really cares”. Being a firm believer that running a business with heart does not need to come at the expense of achieving great results, he decided to apply a more “heartful” approach in his organisation and enroll his colleagues from the newly formed Heart in Business Limited to support this journey realising that Thornton’s Budgens needed to be the ‘laboratory’ for how to apply the heart thinking in the ‘real world’.

Initiating Change – Applying Heart in Business throughout the Organisation

He first gathered his Leadership Team to both rethink how the store should differentiate itself to compete effectively, but also to redefine the roles and responsibilities within the team to ensure everyone could play to their strengths. The session successfully demonstrated the power of collective intelligence to drive innovation as well as the engagement and focus created when people are doing what they love doing.

He then decided to extend Human Potential coaching to close to 30% of his organisation to unleash their inventiveness and potential. He saw them grow, take on more responsibility and bring their creativity to work.

Measuring Change – Quantifying Heart in Business

In order to turn his Human Potential experiment into a robust case study that other businesses could learn from and reapply, Andrew knew that he would have to find a way to put concrete measures behind the intangible HUMAN dimension of his business.

Could he measure something like Inspiration, Self Leadership or Self Awareness? Could he prove that his store was using significantly more of its Human Potential than other Budgens stores?

On his quest to answer these questions, Andrew met Mark Vandeneijnde and Sujith Ravindran from BEING at Full Potential. Their Human Potential assessment tool brought much needed objectivity to this subjective field. Their tool consists of 83 insightful questions from which 4 Human Potential STATES and 23 DIMENSIONS can be derived. These measures are used to quantify how much of an organisation’s Human Potential is expressed today and what it needs to focus on to improve in the future (see diagram appendix 1).

In January 2017, Andrew decided to run the Human Potential Assessment in his store and enrolled the control store to do the same. This case study shares the key findings from the research with the hope that it will also inspire other businesses to bring more heart back into their organisations.

AN INNOVATIVE RESEARCH APPROACH TO MEASURE HUMAN POTENTIAL AND LINK IT TO BUSINESS RESULTS

The purpose of the Human Potential study was to understand whether:

A direct link could be made between the investments in human potential and business performance

Coaching is an effective means to unleash the creative & leadership potential of employees.

A more holistic approach and measurement of Human Potential would lead to new insights to further grow Thornton’s Budgens.

Ideally, this research would have been set up so that a Human Potential read was taken before the people development work and one afterwards. However, given the tool was not available then, we had to find an alternative methodology. The next best way to isolate the impact of Andrew’s approach was to identify a similar Budgens store. The key difference between the control store and Thornton’s Budgens was they hadn’t made the same kind of investment into their people. The control store selected was the closest to Thornton’s Budgens in terms of type of customers it caters to, following the same promotional calendar, and offering similar basic categories. However, we must acknowledge a difference in store size (+40% for Thornton’s Budgens).

After deploying the survey in both stores during the same time-period, the hypothesis was that Thornton’s Budgens would score significantly higher on the key Human Potential measures, and that this would be the main reason for the current business success.

KEY FINDINGS

The Case for Change – Linking Heart in Business with Business and Organisational Performance

1.The coaching investments made by Andrew both for his Leadership Team as well as for his employees have had direct impact on business performance and have contributed to the reversing LFL sales growth trend from -7% in 2014 to +5% in 2016 (the control store went from +2% to -5%, in line with the non-discounter food retailers in the UK).

The great variety of externally run concessions Thornton’s Budgens is currently hosting is a direct outcome of the coaching work done with the Leadership Team. The idea of developing concessions that would meet the local community’s needs came out of that workshop and within three months, the first concession, a juice bar, was opened.

Human Potential coaching in his organisation also proved successful in driving more effective customer engagement, more targeted product ranges, more attractive displays and better store standards as illustrated by the two examples below.

Marco runs the deli department, an area in which sales seemed very elastic to the amount of space dedicated to it. However, increasing deli department space seemed impossible, as there was no way to move the walls and increase total store space. After one of Marco’s coaching sessions, he proactively identified a large chunk of space to packaged bread that was in the deli area and that could be moved elsewhere (replacing some (declining sales) packaged grocery products) freeing up more space for deli products. Since the move, deli sales increased by +16.8% without any impact on bread or other category sales. “We’re all learning to take ownership, letting go of the fear of making mistakes”, Marco.

Seelan runs the store fruit and vegetable department. He’s been working at the store for 15 years. He runs his department very efficiently and does what he is told. After his second coaching session, he started to build impressive tomato displays with farm sourced English tomatoes. Customers love it so much that they post pictures of themselves by the display on popular social media sites. Tomato sales have grown +28% compared to previous the year. Overall fruit and vegetable department sales have grown +8.2% when the tomato displays where in place.

Beyond the sales measure, average length of employee service is also significantly higher by more than 50% in Thornton’s Budgens compared to control store. Employees stay longer in the organisation leading to the theory that this is because they are more engaged.

This work also had a positive impact of other performance measures: gross margin increased 1.5 points during 2016 (and a further 1.5 points so far in 2017) and the already tightly controlled waste has been reduced by 4%. While most costs are outside of the control of the individual or groups of team managers, several areas were affected thanks to a greater team focus: packaging (-31% vs. last year), repairs and maintenance (-17%) and credit card & bank Charges (-19%).

2.The Human Potential Assessment results confirm a higher level of Human Potential being utilized in Thornton’s Budgens compared to the control store. It also shows stronger scores across the Organisational Performance Metrics with Employee Engagement, Customer orientation, and Trustworthiness (defined as “worthy of trust from stakeholders”) being well expressed. The largest gaps highlighted by the highest indices in favor of Thornton’s Budgens are on Getting things done with an index of 117 and on Inventiveness with an index of 116.

This is not surprising and is in line with the findings from the Gallup Organisation[1] which has demonstrated that high employee engagement leads to higher customer loyalty and higher profit. This reinforces the link between the higher employee engagement measured in the Human Potential Assessment and the turnaround in sales.

This is also supported by the Thornton’s Budgens team survey in 2016 where the average satisfaction score rose to 82.4% (vs 80% on the previous occasion) and showed scores for “I love working for this organisation” (82.6%) and “I feel I can make a difference in this organisation” (84.6%).

3.Within Thornton’s Budgens, the employees who have received coaching scored higher than those who have not received coaching support.Employee engagement and ‘getting things done’ are well expressed amongst coached employees, whilst being under expressed amongst those who have not benefited from coaching. Coaching is a key enabler to drive confidence and a sense of ownership within employees so they can safely express and develop their ideas and most importantly transform them into action.

[1] The Relationship between Engagement at Work and Organisational Outcomes – 2016 Meta Analysis: Ninth Edition – April 2016

4. Following the Assessment, a workshop was run with Thornton’s Budgens to turn the Human Potential insights into action and to ultimately impact the organisational processes in a sustainable way. With 64% of Human Potential being utilized, there was still significant room for further growth. One clear opportunity identified by the managers was self-leadership. To address it, all team leaders came together in a session facilitated by Heart in Business & BEING at Full Potential, challenging each employee to think about one decision they’d like to make but are afraid to raise and what they felt was holding them back. This unlocked the realisation that:

i) There is always a way to turn a perceived “win-lose” situation into a “win-win” through dialogue and leveraging the collective intelligence, and

ii) Fear of failure is preventing people from making decisions and driving action.

Very concretely, four specific areas were identified with clear owners to work up ‘win-win’ solutions. Beyond these, the workshop was a starting point for a renewed way of working based on empowerment, less fear of making mistakes, more action and self-confidence. It also drove the creation of a new process with the commitment to meet as a team every month in order to review the status on Self Leadership and any other initiatives raised by the team leaders.

About the Author:

Delphine Blanc is a Business School and MBA graduate with 9 years’ experience in consumer insight and market research for a large FMCG company. She is also a certified Coach and is passionate about the shifts within leaders and their organisations to reach higher levels of engagement, creativity, and a stronger sense of purpose. She is bringing an external eye to the journey of Thornton’s Budgens, Heart in Business Limited and BEING at full Potential. She has relied on the data provided by BEING at Full Potential and Thornton’s Budgens to produce this case study.